Boards should audit own company culture

Boards in both the public and private sectors should take responsibility for the internal audit of their own corporate culture and behaviour

A new report by the Chartered Institute of Internal Auditors (IIA) calls for internal auditors to identify cultural weaknesses and address the “need to change corporate culture”.

The report, launched to coincide with the internal audit profession’s global conference held in London today, said that recent scandals have resulted in reported calls for fundamental changes in corporate culture “across all sectors”. The report refers to recent scandals in banking, the media and healthcare which all revolve around culture, management behaviour and ethics within these organisations.

The IIA calls for internal auditors to “undertake root-cause analysis” to help identify cultural weaknesses and to include and audit cultural "indicators" such as recruitment policies, training, performance management and reward.

Dr Ian Peter, chief executive of the IIA said, “As organisations come under increasing pressure to demonstrate their commitment to improving standards of behaviour they must focus more closely on getting the underlying culture which dictates those behaviours right.

“But on the basis that what gets measured gets done, they must take seriously the need to audit their progress in addressing the need for change.”